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Friday, February 8, 2013

The War on Coal

William Walter Kay

Intro

Propaganda does not drive policy-making; it accompanies it. The
Climate Change campaign is not driving energy policy-making; quite the contrary.

This posting comes on the heels of the September 21, 2012 passage, by
the US House of Representatives, of a Bill entitled: Stop the War on Coal
Act. While unlikely to soon become law, this Bill signals an overdue
awakening to the threat presented by the War on Coal and hopefully heralds a
robust counter-offensive.

This posting juxtaposes the recent histories
of coal-fired power in Germany and the USA.

Highlights:

One
irreconcilable irony of our age is that Germany, a country possessing relatively
modest coal resources and being the redoubt of climate alarmism, is embarking on
a coal-fired power plant building spree while the USA, “the Saudi Arabia of
coal” and the stronghold of climate skepticism, is demolishing its coal
infrastructure.

The world’s largest environmental movement organization,
Germany’s state-owned Reconstruction Credit Institute, invests over $30 billion
into “climate and environmental protection” projects every year. About
75% of Germany’s 23,000 wind turbines were financed by this Institute.

In the USA, between 2000 and 2012, enviro-activists inside and outside
of government forced the early retirement of 140 coal-fired power plants and
thwarted the construction of 170 proposed coal-fired power plants. Regulations
passed by Obama’s EPA will shut down over 200 coal plants, and terminate new
coal plant construction, over the next five years.

Natural gas’s
surpassing coal as America’s main electricity-generating fuel did not result
from shale gas undercutting coal in a market contest. The “dash for gas” was
over before the shale gas revolution took hold. The shale gas revolution would
not have been possible if gas-fired power plants had not been waiting to receive
the shale gas. The “market triumph of gas” narrative ignores the fact that the
critical years of gas’s ascendancy also mark the triumphal climax of the War on
Coal.

The $45 billion takeover and hobbling of TXU Corp. in 2007 was not
a rational business deal; it was political activism aimed at removing a potent
and intransigent pro-coal player from the US electrical industry. It was done
with “other people’s” money and “other people” lost money.

Germany’s
rural landowners are the vanguard of the “Energy Revolution.” Most renewable
energy assets in Germany are owned by rural landowners.

“We have few resources in Germany, two of which are coal
and engineering…In a hundred years, we will not have Russian gas or oil. But in
a hundred years there is the sun and coal.”

So sayeth model German
environmentalist: Frank Asbeck. In 1979 Frank stood shoulder to shoulder with
Petra Kelly and Gert Bastion at the creation of the German Greens. He remains a
party stalwart.

Today Asbeck drives his Maserati from his castle,
through his private hunting grounds, to the Bonn HQ of Solar World. Asbeck is
the CEO and main shareholder of this mammoth enterprise. He also owns extensive
land holdings and 25% of the Hauck Aufhauser Bank. He’s worth around $500
million.

Asbeck champions renewable energy and “indigenous
coal.” He is “a big fan of coal mining in the Ruhr…since I am a
patriot.”

become proficient in the design and manufacture of these technologies, and;

market these technologies abroad.

The goals are to reduce fuel imports, increase manufactured
goods exports, and undermine the competitive advantage enjoyed by rival
countries blessed with abundant energy resources. The Climate Change campaign,
while not solely a German affair, is a deliberate deception used by German
elites to advance this strategy.

All major German political parties
endorse the “Energy Revolution.” All believe “ecological
modernization” creates international market opportunities. All believe:
“Germany will provide the solutions to global warming.”

The Energy Revolution’s
manifesto is 14 Federal Laws bundled into the “Meseberg Program” in 2007.
Meseberg aims to have renewables provide 35% of electricity by 2020 – 66% by
2030. Meseberg presumes public and private investments in renewables of $22
billion per year.

A Meseberg cornerstone, Feed-in-Tariffs for renewable
electricity, originated with the Christian Democrat government in 1991. The
impetus came from small power producers in Bavaria seeking access to the grid.
The 1991 regs forced utilities to feed small producers’ power into the grid.

The Renewable Energy Sources Act, with its compulsory 20-year
Feed-in-Tariff contracts, was concocted by the Social Democrat/Green coalition
in 2000 but revised several times since. Grid operators must accept electricity
from wind farms, solar arrays, and bio-gas plants in preference to the output of
nuclear, coal, or gas plants. Grid operators must bear the cost of hooking up
renewable generators to the grid. Consumers must pay tariffs, above market
prices, to renewable producers. German proselytizing spread this program to 65
jurisdictions around the world.

The solar industry has hit a rough patch. Installation exceeded
expectation and the grid is unable accommodate this output. Due to a paring back
of subsidies, the industry is a experiencing a shakeout. Rumours of its death
are exaggerations.

In 1990 Germany possessed a few experimental wind
farms. Now Germany sports 23,000 wind turbines with a capacity of 29,000 MW.

The renewable electricity industry executed a coup in 2011 when, amidst
the hysteria ginned up around the Fukushima nuclear accident, the Federal
Government announced a nuclear power phase out by 2022. Inscrutably, the
post-Fukushima plan envisioned cutting electricity consumption by 10% while
increasing Germany’s electric cars fleet from 4,000 to 1,000,000 (this has since
been reconsidered).

*

The Energy Revolution benefits landowners, particularly rural
ones. The catalysts in the transition to the “low carbon economy” are
rural landowners. The Federation of German Farmers is a
vociferous advocate of renewable energy.

Less than 0.5% of Germany’s 82
million citizens own an acre. Two-thirds of German households are tenants. (The
term “farmer” is elastic, and there are conflicting German stats on the ratio of
rented versus owner-occupied farms. Tenant farmers are far more common in
Germany than America.)

Rural landowners initiated wind power in the
1990s. By 2000, 75% of Germany’s 6,100 MW of wind power was owned by rural
landowners. In 2000, after urban investors entered the market, rural landowners’
share of wind power ownership declined, but they continued to build turbines.
Moreover, they rent their land to urban wind investors.

Farmers own 20%
of Germany’s photovoltaic panels. Analysts foresee great potential to expand the
deployment of solar panels on barn roofs, surplus pastures, etc. Owners of
estates, cottages, and large suburban properties are also major solar panel
installers.

In 2008 the Federal Government announced a
$500 million incentive program for bio-fuels. This was topped up with $700
million for the years 2009 to 2012.

Additional funding for bio-mass and
bio-gas projects comes through the Agriculture Investment Support
Program, which classifies such expenditures as “coastal environment
protection.” The Federal Government provides 60% of funding.

The
Agricultural Pension Bank has financed over 1,000 small rural
renewable energy projects.

The state bank, KfW, has
financed several thousand bio-gas, bio-mass, and co-generation plants.

As of 2009 German gasoline stations must
sell gasoline blended with 10% ethanol. German farmers supply the feedstock to
Germany’s nine ethanol plants, which distill 600,000 tonnes a year.
Three-hundred and fifty stations offer an experimental 85% ethanol fuel. Only
“flex fuel” cars can burn this fuel. German car companies are feverishly
developing such cars.

Bio-fuel policies rescued farmers from the “food commodity price
roller coaster.” By burning part of their harvest as fuel, farmers can
demand higher prices for the remainder they sell as food. Bio-fuels provide a
sizable portion of farm income. Farmers are “eco-energy entrepreneurs.”

Germany produces half of Europe’s bio-gas. (Bio-gas is methane derived
from manure and silage – commodities hitherto used for fertilizer). Since 2008
bio-gas has been fed into the natural gas pipeline grid. Bio-gas is also used to
generate electricity. Bio-gas-fired plant output rose ten-fold over the last
decade to 1,600 MW. German Bio-gas Association members own
6,800 methanization plants.

According to the German Bio-mass
Research Centre, bio-gas has an annual potential of 12 MTOE (Million
Tonnes of Oil Equivalent). German annual natural gas consumption is 77 MTOE.

According to the Institute of Applied Ecology, a
pan-European bio-gas surge could eliminate the need for Russian gas imports by
2020, thereby saving the EU $40 billion a year.

Ambitious renewable
energy schemes flourish in the countryside. Scores of rural municipalities are
committed to going 100% renewable. The rural-dominated German
Association of Towns and Municipalities supports 100% renewable.

The rural Lander of Schleswig-Holstein boasts 2,700 wind turbines; 1 per
1,000 citizens. Half the electricity consumed in Schleswig-Holstein is from
renewables. Schleswig-Holsteiners plan to be 100% renewable by 2020. Rural
politicians extol renewable energy as a local jobs creation program and as a way
to keep money circulating in local economies. Renewable energy’s “rural
turnover” in Germany in 2010 was $14 billion. Rural politicians dream of freeing
their people from the clutches of the Big Four power utilities.

*

The Big Four utilities (E.ON, RWE, EnBW, and Vattenfall) have
done little to promote renewables. They belatedly embraced renewables and own
only 4% of renewable capacity. They are vilified by Greens as enemies of the
Energy Revolution.

Most investment in renewables comes from small
utilities, rural municipalities, rural landowners, farmers’ co-ops, governments,
and government banks such as KfW.

In 2010 Germany’s 375,000 farmers
invested $8 billion into their operations. 70% of this went to renewable energy
projects.

Germany’s third largest bank, KfW (Reconstruction Credit
Institute), was created by Anglo-American occupation forces after WWII. KfW is
owned 80% by the Federal Government and 20% by Lander governments. KfW has no
retail branches; it deals exclusively with established businesses.

KfW’s
motto is “We Promote Germany.”

“Sustainability” is a
key facet of KfW’s national and international mission.

In 2011, KfW
financed $90 billion worth of projects. One-third of these funds went to
“climate and environmental protection.” In 2010 KfW funded $35 billion
worth of “climate and environment” projects.

According to the
Heinrich Boll Foundation:

“The Deutsche Ausgleichsbank (DtA), a
public-private bank that merged with KfW in 2003, debt financed roughly 90% of
all German wind projects…”

(By 2003 German wind capacity was 14,603
MW.)

In 2009 KfW boasted of financing 54% of German wind power (and 43%
of all German renewable energy projects).

Heavy industry favours renewable mega-projects like the Desertec
Initiative and North Sea Offshore. Such projects lack the mass support base
enjoyed by the competing strategy of small projects affixed to private land.

German
offshore wind capacity stands at 520 MW with 900 MW under construction.
(Gleanings from company press releases provide insights into the inordinate
expense of offshore wind: three recently announced projects with a combined
capacity of 178 MW had a combined estimated construction cost of $6 billion –
over ten times more expensive than coal power.)

German Solar Industry Association – an intermediary between
Germany’s 800 solar businesses and the Federal Government. The Association was
established in 2006 as an alliance of four predecessor solar alliances, the
oldest dating to 1979.

German Energy Agency (DENA, est. 2000) – 50% owned by the
Federal Government and 50% owned by a syndicate representing: KfW, Allianz SE,
Deutsche Bank, and DZ Bank. DENA uses its $30 million annual budget to run an
expertise clearing house for several hundred engineering and financial firms
involved in renewable energy.

German Advisory Council on the Environment – an influential
non-partisan state-funded think tank advocating a 100% renewables Germany.

Econsence – doubles as the German chapter of the
World Business Council for Sustainable Development. Econsense’s
33 members include: Deutsche Bank, E.ON, Nordbank, Munich Re, Flagsol, Siemens,
RWE, and ABB. Econsense was founded in 2000 by the German Federation of Industry
“to pool corporate activities on sustainability topics such as climate
protection” and “actively shape the political and social
discourse.”

Transatlantic Climate Bridge – established in 2008 by the
German Foreign Affairs Ministry to promote climate activism within all levels of
Canadian and American governance.

*

Germany’s electrical transformation is part of a social
counter-revolution. On one side, wealthy property owners install solar panels
and wind turbines. Their electricity bills decline and they pocket tidy profits
from the surplus power they feed into the grid. On the other side, average
German households’ electricity bills have doubled over the last decade. In 2011
electricity prices rose 10% and 600,000 German households had their power cut
off for non-payment. 15% of Germans live in “fuel poverty.”

Similar
dynamics characterize Germany’s $4 trillion multi-year program to retrofit
buildings with “climate-friendly” energy-saving technology. Much of this
mandated expenditure will be done on rented dwellings. Landlords may re-coup all
expenses from their tenants.

*

Not only are average German households put out by the Energy
Revolution, certain industrial sectors are deeply dissatisfied.

To begin
with, renewables were fraudulently advertised. Wind turbines were said to
deliver electricity equal to, on average, 30% of their stated “capacity.”
However, a recent ten-year German study concluded wind turbines produce, on
average, 16% of capacity. Even at their name-plate capacity, wind turbines are
far more expensive to build than are coal plants on a cost-per-MW basis. Worse,
the inherent intermittency of wind (and solar) power render them incapable of
meeting industry needs.

One-fifth of German industry has announced plans
to shift production abroad. Among their chief complaints are: electricity costs,
carbon permit costs, and disruptions of electricity provision. Steel, aluminum,
cement, plastics, and chemical industries are impacted.

Industrial
electricity prices in the EU average $180 per MW-hour. In Germany they average
$196, and they are due to rise 20% before 2020. Access to cheap reliable
electricity was an advantage German industry had over its neighbors; this is
gone. Germany was a power exporter; now it is a power importer.

The
introduction of renewable electricity to the grid has caused split-second power
outages – annoyances to residential power customers but traumas for automated
metallurgical plant managers.

Some of GEA’s zinc operations and
Aurubis’s copper operations are moving to Asia and South America. Norsk Hydro’s
aluminum plant has shut down two production lines. Electricity is 50% of Norsk’s
production costs.

Steel giant Thyssen Krupp (TK) expects to shed 5,000
German jobs due to high electricity prices. TK’s electricity bills rose 30%
since 2000. TK sold a 450-employee stainless steel mill to a Finnish competitor
after the mill’s electricity bill eclipsed 20% of production costs. TK blamed
this sale on Berlin’s “irresponsible energy policy.”

*

Enviro-skeptics decry “de-industrialization” in apocalyptic
terms as though it were national suicide. What eco-fascists have in mind is not
de-industrialization back to the Middle Ages but rather a measured industrial
downsizing. If 20% of German industry packed up and moved out, the German landed
estate would profit. Collapsing labour prices would benefit farmers, the
hospitality-tourist sector, and employers of domestic help. Workers would still
spend the same amount on rent and food – it is all they will be able to afford.
As well, a measured downsizing will diminish the political clout of industry and
industrial unions, thereby tightening the landed estate’s lock on state policy
processes.

Thus the German state steers between two ditches: a)
abandoning basic electricity provision; and b) forsaking the Energy Revolution’s
autarkist and aristocratic aims. The solution is to shovel in more German coal.

In August 2012 RWE fired up a 2200 MW coal plant in Cologne, one of 25
coal-fired plants being built across Germany. As a sop to environmentalists,
these new coal plants will emit 12% less CO2 than older models due to improved
fuel efficiency. None are equipped for Carbon Capture and Storage (CCS).

German coal consumption rose 5% since the 2011 Fukushima decision. RWE’s
coal use is up 20%. RWE and E.ON shun natural gas as being too costly. Deutsche
Bank predicts 6,500 MW of German gas power generation will be shuttered by 2015.

Coal’s renaissance is attributed to: a) the nuclear phase out; b)
declining coal prices, and; c) collapsing “carbon permit” prices. The latter
factor, often deemed the most important, was caused by a glut of permits. EU
permit prices fell 43% over the last year to $10 per tonne. European coal plants
had profits of $20 per MW-hour in 2012, up from $12 in 2011. Gas plants barely
broke even. This occurred despite gas plants needing only half the carbon
permits coal plants are required to buy.

In September 2012 a Union Bank
of Switzerland spokesman quipped:

“The build-out (of coal
plants) has nothing to do with low carbon prices. All these projects were
already decided and kicked off several years ago.”

This betrays the
existence of a pro-coal strategy planned well in advance of Fukushima and in
flagrant disregard of any coherent Climate Change policy. Of course, not all
Germans welcome the coal renaissance.

German environmentalism’s
antipathy to coal dates to the 1970s when mysterious reports from Bavaria blamed
waldsterben (forest death) on Acid Rain from coal plants. By 1984 99%
of Germans knew of Acid Rain and 75% considered it a crisis. Much of the anxiety
was directed toward East European coal plants unequipped with the latest
desulphurization technology. By the early 1990s the Acid Rain hoax was winding
down – and it was a hoax: a comprehensive study conducted by Finland’s forest
ministry found no decline in European forests between 1971 and 1990.

In 2009
enviro-activists blocked a CCS pilot project designed to dispose of coal
emissions. More recently, eco-activists, supported by the SPD-Green government
of Schleswig-Holstein, blocked a $3.2 billion coal plant.

Such
protestations against coal are either half-hearted posturing or are rooted in
the enviro-movement’s margins. The ruling consensus is that the national
interest is best served by an electricity system relying primarily on German
coal and secondarily on German-built renewables.

Q: How will this combat
Global Warming?

A: Global what!?!

A Brief History of the War
on American Coal-Fired Electricity

Coal is the USA’s most abundant fuel. The USA possesses the
world’s largest coal deposits. Coal is a cornerstone of the US economy. Coal is
a major American export. The American coal industry has 90,000 direct employees
and ten times as many indirect ones. Until 2009 coal-fired power plants
generated most of America’s electricity. Suppressing American coal means
suppressing America.

According to the Energy Information Administration
(EIA) the US has “demonstrated” coal reserves of 440 billion tonnes. The
National Academy of Science guestimates US coal reserves at 1,500 billion
tonnes. Other estimates run as high as 4,000 billion tonnes.

US coal
production averages 1 billion tonnes per year.

America’s remaining 580
coal-fired power plants house 1,400 generators. 73% of these plants are over 30
years old. They are subjected to a merciless enviro-regulatory and
enviro-activist assault. The construction of new coal-fired plants is
effectively becoming criminalized.

*

This historical sketch emphasises the War on Coal’s air
pollution campaign, which targets coal-fired electrical generation. There is a
parallel ground campaign targeting coal mining.

The first offensive against coal-fired power ran from 1978 to
the 1990 Clean Air Act Amendments. During this offensive, while mention was made
of Global Warming, soot pollution, etc, the cause celebre was Acid Rain.

While enviro-sceptics dub Acid Rain “the Global Warming of the
1980s,” in fact Global Warming and Acid Rain are both 19th century
hypotheses re-discovered and hyped in the late 1970s.

The New York
Times, in the late 1970s, began accusing mid-western coal-fired power
plants of raining acid upon precious New England forests.

The poster
child of acid-ruined forests was a wretched stand of spruce on Camel Hump
Mountain, Vermont. ABC Television ran a lengthy hysterical national news piece
about Camel Hump. (This news piece blamed Acid Rain for the premature deaths of
50,000 American citizens per year.) Journalists following up the ABC story were
surprised to find this tragic stand of spruce engulfed by a thriving forest.
Further analysis revealed the celebrity spruces to have been irreparably damaged
by a rare localized drought.

America’s Acid Rain crusade differed
slightly from Europe’s by its emphasis on alleged damage to lakes, especially
lakes in New York’s Adirondacks. In 1980 the Environmental Protection Agency
(EPA) and the National Academy of Sciences issued alarming proclamations about
dramatic increases in the number of acidified lakes and the degree of these
lakes’ acidity. The EPA arbitrarily deemed pH levels below 5 as aberrant;
ignoring glacial evidence of natural pH levels as low as 4.2.

(Acidity
is measured on a 14-point power of Hydrogen – “pH” – scale. The lower the pH,
the higher is the acidity. Note: “Acid Rain” is a misnomer as dissolved CO2
renders all rain acidic. Also note: Apple juice is 16 times more acidic than the
worst Acid Rain.)

Acid Rain alarmists initially focussed on
anthropogenic nitric and sulphuric acidity but soon dropped nitric acidity after
it became obvious that rain-borne nitrogen is readily lapped up by plants. While
sulphur is also a vital plant nutrient, there can be surplus sulphur dioxide
(SO2) in rain, and this does trickle through watersheds into lakes.

In
1980 President Carter endorsed a report from his Council on Environmental
Quality christening Acid Rain a grave crisis. In the same year, the EPA launched
its National Acid Precipitation Assessment Project (NAPAP) with a $10 million
budget. NAPAP morphed into a ten-year $550 million project. NAPAP endures as the
most exhaustive scientific analysis of Acid Rain.

A 1984 NAPAP report
identified a meagre 630 acidic lakes whose combined surface equalled 0.02% of
total American lake surface area. Most acidic lakes were in Florida, an area
unaffected by coal emissions.

A 1987 NAPAP report doubted any connection
between coal emissions and Acid Rain damage. This set off an enviro-tempest
culminating in the firing of NAPAP’s Director. His replacement was ordered to
rewrite the report. NAPAP’s final report (1990) concluded:

Acid Rain has not harmed forests. The at-risk trees – high altitude East
Coast spruces – represent less than 1% of North American forest cover, and even
here Acid Rain damage is dubious. Between 1952 and 1987, forests of the US
Northeast grew by 78%.

Four percent of US lakes were acidic. One quarter of these lakes were
naturally acidic. The rest had been “somewhat influenced” by human activity. All
acidic lakes could be quickly de-acidified by sprinkling lime into them. The
cost of a national liming program would be $750,000.

A lake’s acidity is determined by the bedrock beneath, and
human land-use of a lake’s environs. Run-off from surrounding land contributes
90% of lake water. Precipitation onto a lake contributes 10%. If rocks and flora
around a lake are alkaline, then the lake will have low acidity and abundant
aquatic life.

Fossils prove Adirondack lakes were historically acidic
due to run-off through peat and pine and due to the bedrock’s low limestone
content. Indians knew Adirondack lakes were fish poor. Settlers tried and failed
to stock these lakes with fish. Then 19th century lumbering and slash-and-burn
agriculture covered watersheds with ash. Run-off through this alkaline surface
reduced lake acidity and fish thrived. 20th century conservation programs
rejuvenated the forests and re-acidified the lakes.

The release of
NAPAP’s final report was delayed until after the passage of the 1990 Clean Air
Act Amendments. Politicians did not want to disturb the delicate consensus they
had assembled around SO2 emission cuts. Senators skimmed the NAPAP report for an
hour. The House of Representatives never looked at it at all. The Clean Air Act
Amendments mandated 10 million tonnes per annum of SO2 emission cuts by 2000 at
a projected cost to industry of $5 billion.

SO2 emission reductions were
achieved by power companies’ installing expensive “scrubbers” and other
technologies to capture sulphur from coal. Greater reductions were achieved by
switching to low-sulphur lignite coals. This unintended consequence caused a
boom in lignite mining, particularly in Wyoming, which had not been a major coal
producer. Now Wyoming’s lignite mines account for 40% of US coal production.
Seventy-five coal trains, each 130 cars long, leave Wyoming’s Powder River Basin
every day. Powder River coal fuels a fifth of US electricity.

SO2
emission reduction targets were achieved ahead of schedule, but
environmentalists were flummoxed because coal-fired electrical generation had
not been curtailed – albeit it was made less efficient and more expensive.

*

After a mid-1990s lull, a second offensive against coal-fired
power was mounted, this time framed mainly as a struggle against coal’s CO2
emissions and their purported exacerbation of Global Warming.

As for
Global Warming science:

Earth’s surface temperature and Earth’s atmospheric CO2 concentrations have
varied over the ages with little correlation betwixt the two. There is no
compelling empirical evidence supporting the proposition that increasing CO2
levels causes warming.

As airborne CO2 is essential for plant life, rising CO2 levels are
preferable to declining levels.

Over the eons Earth has at times been much warmer and much colder than at
present. Warm times are periods of abundance. Cold times are hard times. Warming
is a blessing.

There has been no appreciable Global Warming since 1998 despite rising CO2
levels and in diametric contradiction of predictions made by leading Global
Warming advocates.

While Global Warmers initially targeted all hydrocarbon fuels,
primarily petroleum, by the mid-1980s their focus settled on coal. In the 1990s
natural gas firms (BP, Shell, Enron, et al.) boarded the Global Warming
bandwagon to advertise their wares as a coal substitute. Natural gas emits half
the CO2 per unit of electricity than does coal; hence, natural gas lobbyists
argued their product was “climate-friendly.”

*

A narrative has emerged wherein natural gas’s surpassing of
coal as America’s premier electricity-generating fuel resulted from shale gas
undercutting coal in a fair market contest. This is propaganda.

Here are
some dates and facts tracing the arc of gas-fired electricity’s rise: In the
first decade of the 21st century 81% of the generating capacity added to
America’s electrical infrastructure consisted of natural-gas-fired power plants.
Nearly all these plants were built pre-2008. In fact, most of America’s
natural-gas-fired fleet entered service between 1998 and 2003.

Commercial power plants are not impulse purchases; years pass between
their conception and construction. The 1998-2003 flurry of gas plant
construction resulted from decisions made 1996-99ish. The starting gunshot for
the “dash for gas” was Clinton’s 1996 re-election.

(On September 18,
1996 Clinton proved his green bona fides by decreeing the Grand
Staircase-Escalante National Monument, thereby enclosing 1.9 million acres of
Utah. The US Geological Survey estimates this area holds 30 billion tonnes of
minable coal. Clinton’s declaration nixed Andelex Coal’s shovel-ready designs on
a multi-billion tonne deposit of high-volatile, low-sulphur coal. This mine
would have employed 1,000 Utahans. Congress, supported by Utah Democrats, had
blocked efforts to turn this area into a park. Clinton made his decree from the
safety of Arizona after giving Utah’s Governor 24 hours’ notice. Utahans wore
black arm bands after the declaration, and in November they voted Republican by
a 21% margin. Clinton, with enviro-movement support, waltzed back into the White
House.) Shale gas, accessed through horizontal drilling and hydraulic
fracturing, accounted for a tiny portion of US gas production in 1990. This
portion rose to 23% by 2010.

Between 1990 and 2010, total US gas
production grew from 18 trillion to 22.5 trillion cubic feet, the main jump
occurring post-2005.

A February 2008 New York Times article
(Utilities Turn from Coal to Gas) noted utilities were switching to
natural gas because environmentalists were stymieing coal plant construction.
This article added that major banks were discouraging investment in coal. In
early 2009 the Economist (The Writing on the Wall) confirmed
US utilities were caving to political pressure and abandoning coal.

US
natural gas prices began collapsing in late 2008. The price of 1,000 cubic feet
of gas fell from $13 in June 2008 to $3 in July 2009.

Thus the dash for gas was over before the shale gas revolution began.
The shale gas revolution would not have been possible if the gas-fired plants
had not been pre-built and waiting to receive the shale gas. Most importantly,
the “market triumph of gas” narrative ignores the War on Coal despite the fact
that the critical years of gas’s ascendancy (2007-2012) also mark the climax of
the anti-coal crusade.

The EPA’s 2004 proposed mercury emission standards for
coal-fired plants engendered much litigation and political wrangling. Also in
2004 the Sierra Club, Friends of the Earth, and National Resources Defence
Council (NRDC) launched a coordinated blitz about mercury pollution.

In
2005 the EPA sought to extend Maximum Achievable Control Technology (MACT) rules
to mercury and other metal emissions from all large boilers and furnaces.

As for the toxicology of mercury from coal:

Mercury is a ubiquitous natural element. Ketchup and barbeque sauces contain
50 times the “environmentally safe” concentrations of mercury.

Health risks arise when methylmercury, synthesized by aquatic bacteria,
accumulates in fish and whales. Humans eating inordinate amounts of such animals
risk mercury poisoning (hydrargyria). This danger is mitigated by the pervasive
presence of the methylmercury blocker selenium in fish. Seychelles Islanders eat
fish twice a day for their entire lives without succumbing to hydrargyria.

Epidemics of mercury pollution appear in computer simulations concocted by
enviro-scientists but not in public health records. Hospitals are not crammed
with hydrargyria sufferers.

Faroe Islanders display detectable, yet contentious, evidence of mercury
poisoning. (The Faroe Islands, situated between Iceland and Scotland, are home
to 40,000 people.) Whale is a Faroe Islander staple. Whales are low in selenium,
high in methylmercury. Faroe Islanders have mercury concentrations 350 times
higher than average Americans. International officials have asked them to stop
eating whales, but the Faroese do not think this is necessary.

The international precautionary level for mercury in humans, 58 parts per
billion (ppb), comes from the Faroe Islands studies. If those studies are
properly adjusted for the presence of other chemicals, the level would be 71
ppb.

A 1999 Centre for Disease Control study sampled 1,709 US women of
childbearing age. All had mercury levels in the 1 to 21 ppb range; none were
symptomatic.

The EPA arbitrary arrived at its “reference dose” by dividing the Faroe
Islands study level by 10, thus yielding an uber-precautionary level of 5.8 ppb.

Alarms were sounded after a 2008 study of Floridians revealed mercury
concentrations as high as 25 ppb. However, a study of 550-year-old mummies from
Alaska revealed concentrations 5 times that level. Similarly, a study of tuna
conducted between 1972 and 1998 showed declining mercury levels.

The EPA’s main worry is for pregnant women who subsist on freshwater fish –
a mythical social cohort. After investigating the matter for a quarter century,
the EPA has yet to come up with a single case of a baby being developmentally
disabled by mercury pollution.

American coal-fired power plants are responsible for 3% of the mercury
floating in American skies. Volcanoes, subsea vents, and geysers contribute
almost all environmental mercury. Forest fires are another source of
environmental mercury as trees extract mercury from the subsoil and release it
during combustion.

Mercury-scare stats, and other enviro-toxic tales, are often
variations of the “no threshold fallacy.” By this illogic: If a substance has
toxic potential, then large emissions of this substance, even in concentrations
of a few parts per billion, must be surreptitiously poisoning people. In
reality, such dilute concentrations do not harm anyone. A block of ice crashing
onto a person’s head can be lethal, but snowflakes do not fracture thousands of
skulls every year.

*

Between January 2001 and December 2007, eighty-eight proposed
coal-fired power plants were thwarted by non-governmental and/or governmental
enviro-activism.

In 2007 the war on coal-fired power ramped up. The
tenor of the times can be gauged from the writings of James Hanson (a leading
climate alarmist, and NASA official, for 30 years) who in 2007 declared:

“If we cannot stop the building of more coal-fired power plants,
those coal trains will be death trains – no less gruesome than if they were
boxcars headed to crematoria…”

When people complained his Holocaust
analogy was over-the-top, Hanson penned more articles denouncing coal plants as
“factories of death.” In TheGuardian he wrote,
“Coal is the greatest threat to civilization and all life on the
planet.” (He was arrested at an anti-coal protest in 2010.)

*

Circa 2007 Texas-based utility TXU Corp. was having none of the
War on Coal. They planned 11 more coal-fired plants in Texas plus additional
ones in Pennsylvania and Virginia.

An armada of enviro-groups led by
Environmental Defense (ED) assailed TXU. ED complained: “TXU and Texas are
sprinting full speed back to the 1950s.”

Environmentalists e-mailed
TXU officials en masse. Rainforest Action Network sent letters to 54 financial
institutions warning them that if they lent money to TXU they would be boycotted
and picketed.

In late 2007 three investment firms – Texas Pacific Group
(TPG), Goldman Sachs, and Kohlberg Kravis Roberts – purchased TXU for a record
$45 billion. TPG Chair David Bonderman is a director of WWF, Grand Canyon Trust,
and Wilderness Society. (Bonderman’s rise may be attributable to his connections
to the eco-billionaire Bass family.)

To stage the TXU takeover Bonderman
tasked former EPA Administrator William Reilly to liaise with elite
environmentalists. These secret talks were “unusual” and a
“watershedinAmericanhistory.”
Environmentalists were assured the takeover would result in many cancelled coal
plants.

The takeover budget consisted of $8 billion in equity (cash) and
$37 billion in bonds to be payable by the soon-to-be-conquered TXU. The cash
came from clients of the three investment firms – mainly pension funds and pools
of small passive investors.

After the takeover TXU immediately shelved
plans for 8 of its 11 proposed coal plants in Texas and its proposed coal plants
in Pennsylvania and Virginia. TXU, renamed Energy Future Holdings (EFH), now
groans under the debt borne of the takeover and has had to increase its
electricity prices. EHF owns a meagre 8,000 MW of coal-fired power but boasts of
being one of America’s largest purchasers of wind power.

In 2010 the
pension funds et al. that ponied up the $8 billion in cash absorbed a $5 billion
write-down, confirming suspicions that TXU shares were overpriced.

The
TXU takeover was not a rational business deal, it was political activism aimed
at removing a potent and intransigent pro-coal player from the US electrical
industry.

*

In 2008 the Alliance for Climate Protection (Al Gore, Chair)
undertook two anti-coal projects: a) Repower America (to transforms America’s
energy infrastructure), and b) the WE Campaign (a push for aggressive reductions
in CO2 emissions). The latter, a three-year $300 million blitz, paid celebrity
“opinion leaders” to appear in television and magazine ads. WE Campaign was one
of the largest public advocacy operations in US history.

Also in 2008
Gore implored young Americans to use civil disobedience to block coal plant
construction, and he launched the Reality Coalition with a New York
Times op-ed demanding a ban on constructing any coal plants unequipped with
100% Carbon Capture and Storage technology.

In a 2008 San Francisco
Chronicle interview, presidential candidate Barrack Obama praised the
proposed federal CO2 Cap and Trade legislation, adding: “…if a person
wants to build a coal-powered plant, they can, its just that it (Cap and
Trade) will bankrupt them, because they’re going to be charged a huge sum
for all that greenhouse gas that’s being emitted.”

Obama promptly
repeated the phrase about the virtue of bankrupting coal-fired power
plants.

(Cap and Trade passed the House in 2009 but was abandoned by
Senate Democrats in 2010 for lack of the required 60 votes. This was a blow to
Senate Majority leader Harry Reid (D, Nevada) whose mantra is: “Coal makes
us sick.”)

In the 100 days following Obama’s January 20, 2009
inauguration, nine proposed coal-fired power projects were cancelled. These nine
plants would have generated 6,650 MW – enough to supply five million homes.
Among the thwarted was a 1,500 MW plant scheduled for a Navaho reserve.

Immediately after Obama’s inauguration, the EPA rolled out an
unprecedented wave of anti-coal regulations. On January 24, 2009 the EPA filed a
novel air quality objection to South Dakota’s proposed $1.3 billion 580 MW Big
Stone II coal plant. (The plant was cancelled months later.) On April 17, 2009
EPA designated CO2 a danger to public health.

During Obama’s first 100
days, enviro-supremo Robert Kennedy Jr. gave a speech in Washington, DC wherein
he denounced coal companies as “criminal enterprises” whose executives
“should be in jail…for all eternity.”

The war on coal-fired power revolves around twin loci: the EPA
and Sierra Club. Their twin objectives are closing existing coal-fired plants
and thwarting proposed ones.

While the EPA is the federal government’s
vanguard coal warrior, dozens of federal branches and departments have been
enlisted such as the US Supreme Court, Department of the Interior, and the
Export Import Bank.

In a 5-4 ruling in 2007 (Massachusetts vs.
EPA),the US Supreme Court okayed the EPA’s regulation of CO2.
(Congressional efforts to overturn Massachusetts vs. EPA came in the
form ofthe Energy Tax Prevention Act, which passed the House on April
2011 by a 255 to 172 vote. This bill, which seeks to strip the EPA of its CO2
regulatory powers, languishes in the Senate.)

To suppress Appalachian
coal mining, the Department of the Interior prohibits “valley fills” within 100
feet of any stream. (When compact ground “overburden” is removed from above a
mineral deposit, the overburden expands, making it impossible to stuff back into
the hole from whence it came.) In coal-rich Appalachia, surplus overburden is
dumped in valley fills, thereby providing welcome level land. In its ongoing
litigation regarding this matter, the Department of the Interior is aided by
NRDC lawyers.

The US Export Import Bank refused a loan guarantee for a
$600 million sale of heavy machinery manufactured by Bucyrus Ltd (Wisconsin)
because the machinery was destined for an overseas coal-fired
plant.

State governments have also heard the call. For instance, in 2008
then Kansas Governor Kathleen Sibelius, a Democratic Party heroine, blocked two
coal plants because their emissions would allegedly aggravate Global Warming and
negatively impact local farmers. The power company salvaged one plant by
converting the other into a wind farm.

Sierra Club (SC) leads a dozen
national environmental groups in the War on Coal. These groups in turn fund and
guide hundreds of local battles against coal-fired plants. SC has recruited
234,766 local activists into a nation-wide matrix of “concerned citizens.” Local
cells provide the legal standing needed to oppose specific coal projects in the
courts.

The EPA’s governmental allies and the SC’s non-governmental
auxiliary are fully integrated. The EPA dishes out $400 million a year to
enviro-advocacy groups and other onside organizations like American Lung
Association affiliates. The latter dutifully came forward with studies accusing
coal emissions of killing 20,000 Americans a year. Many EPA-funded
enviro-advocacy groups are coal warriors; some engage in civil disobedience.

The EPA pays enviro-groups to sue the EPA. The EPA then loses or settles
these lawsuits in ways that compel the EPA to expand its enforcement powers.
Twelve elite enviro-groups have sued the EPA 3,000 times. In 2008 NRDC
(recipients of $6.5 million in EPA grants since 2000) sued the EPA to compel the
agency to enforce greenhouse gas performance standards. In 2011 the EPA issued
regulations compelling coal plants to install multi-billion-dollar haze
reduction equipment in order to settle a lawsuit launched by the Environmental
Defence Fund – a group that has received $3 million in EPA grants. Environmental
Law Institute, a group receiving $10 million from the EPA since 2000, published
a “Citizen’s Guide” on how to sue the EPA.

There is also a revolving
door between personnel from the EPA and SC. Al Armendariz was forced from a top
EPA position in April 2012 after a leaked video showed him bragging about
randomly “crucifying” oil drillers. Weeks later, SC hired Armendariz as
an anti-coal activist.

While the SC has long protested coal mining,
their concerted attack on coal-fired electricity began with their 2002 launch of
the National Coal Campaign. According to SC lore, this initiative was a response
to secret meetings between VP Dick Cheney and coal execs whereat a ‘Coal Rush’
to build 150 coal-fired plants was plotted. National Coal Campaign, later
re-branded Beyond Coal, is the largest campaign undertaken by the SC in its
125-year history. By 2010 Beyond Coal had an $18 million annual budget and a
staff of 100.

Between 2002 and 2010, solar power industry bagman David
Gelbaum divided donations of $200 million between the SC and the SC Foundation.
Obama’s first budget increased EPA funding by 36% to $10.3 billion. The EPA
was granted carte blanche authority to go after coal and they used it.

In 2010, while introducing draconian coal mine water emission standards,
EPA Administrator Lisa Jackson waxed eloquent on the “biological integrity
of streams.” Her main worry was salt pollution. Industry spokespeople
contend Perrier water does not meet the new purity standards. Major mines have
had permits cancelled for non-compliance with EPA water emission standards.

In 2010 the EPA mandated more stringent limits on SO2 emissions from
existing coal-fired power plants. 43% of coal-fired plants do not have the
desulphurization equipment needed to make them compliant.

In 2010 the
EPA began pushing to re-classify coal ash a “hazardous” substance. This would
end the benign practice of recycling ash into cement, bricks, etc. and would
increase ash disposal costs 500%.

In 2011 billionaire philanthropist and
New York City Mayor Michael Bloomberg, opining how “coal kills every
day,” gave $50 million to Beyond Coal. (Unsurprisingly, New York State’s
electricity mix is: natural gas 45%, coal 7%, with the rest coming from hydro,
nuclear, etc.)

At a gala ceremony on December 21, 2011, the EPA unveiled
their new 1,117 page MACT Utility rules and related Mercury and Air Toxics
Standards (MATS). A 1,000-word press release used the word “toxic” 21 times. The
main dread, again, is methylmercury accumulations in freshwater fish being eaten
by pregnant women.

MATS and MACT Utility rules are aimed at the 1,100
oldest coal-fired generators. Equipment for capturing mercury and other metal
emissions at these coal plants must be as effective as the equipment found at
the top performing 12% of coal plants. Owners have four years to comply. These
rules could force utilities to spend $100 billion retrofitting old plants. These
rules will also increase plant operating costs. A likely result of MATS/MACT
Utility will be the forced retirement of most of the coal-fired fleet.

An ongoing collateral struggle surrounds EPA ‘New Source’ policies. For
years now, all New Sources of power must have state-of-the-art emissions
abatement equipment. The EPA contends repairing old coal plants constitutes a
New Source of power because repairs increase plant output and emissions. Such a
designation could turn routine maintenance jobs into $100 million endeavours.
One consequence of this regulatory battle is coal equipment not being properly
maintained.

While SC advocates a complete shutdown of the coal industry,
their interim mission is: “to retire 1/3 of the country’s dirty coal plants
by 2020...”

“…the Crawford coal-fired power plant in Chicago became the
100th to announce its retirement since the beginning of 2010…That doesn’t even
count the proposed plants that have been scuttled since communities across the
country started standing up and saying ‘no’ to coal. At last count the Sierra
Club’s Beyond Coal campaign prevented 166 of those.”

This posting
links to a data base detailing the blocking of 172 proposed coal projects
(including a few coal-to-liquid and coal gasification plants).

These
figures conform to the US Chamber of Commerce’s ProgressDenied report of March 2011. Chamber researchers tallied American
energy projects either currently stalled or recently killed by enviro-activism.
They found 111 coal-fired power and coal-to-liquid plants fitting this
description.

On the day of Brune’s posting, the retirements of nine
coal-fired plants were announced. Seven of those plants were from GenOn Corp.’s
fleet in Pennsylvania and Ohio. In May 2012 Edison International announced the
closure of two coal-fired plants near Chicago. In June 2012 FirstEnergy Corp.
announced the closure of seven coal-fired plants in Ohio, West Virginia, and
Pennsylvania. (FirstEnergy must spend $975 million to make its remaining seven
coal plants complaint with EPA standards.)

The EPA figures its MATS/MACT
Utility rules will close 10,000 MW of coal-fired power. The EIA estimates 49,000
MW of coal-fired capacity will be retired by 2020. Industry claims MATS/MACT,
combined with rules regarding coal ash and cooling water transport, will shutter
80,000 MW of coal-fired power.

The death knell for proposed coal plants
rang on March 2012 when the EPA decreed new power plants may release no more
than 1,000 pounds of CO2 per MW-hour. US coal plants typically emit 1,768 pounds
per CO2 MW-hour. (Natural gas power plants typically emit under 1,000 pounds of
CO2 per MW-hour.) While dozens of proposed coal plants have already been
approved, few are likely to proceed to completion. With the advent of the 1,000
pound rule, it is unlikely any more plants will be approved – unless Carbon
Capture and Storage (CCS) breakthroughs are in the offing.

CCS is
commercially untenable. Installing CO2 capturing technology increases a
coal-fired power plant’s construction costs by at least 50%. Storing CO2 from
coal plants will require a vast pipeline network taking a generation to build.
Pumping CO2 into the ground requires a phenomenal amount of energy. Mandating
CCS is a de facto prohibition on coal-fired power.

*

America’s two largest electricity companies, Duke Energy and
American Electric Power, are members of the Global Sustainable Electricity
Partnership – an international cabal hatched at the 1992 Rio Summit. Membership
is restricted to the world’s largest electric utilities. The Partnership
promotes green energy. A Duke exec currently chairs the Partnership’s board.

Duke Energy, America’s largest US electrical company, sells 58,000 MW to
customers in the Carolinas, Florida, Ohio, and Kentucky. Duke’s electricity
comes from coal, natural gas, oil, nuclear, and hydro. In the face of
unpredictable markets and potential government regulation of carbon, Duke’s
bean-counters contend: “fuel diversity is the least cost option.”

Duke supports a Cap and Trade regime for CO2 emissions. Their website is
replete with Climate Change propaganda and trophies of their cooperation with
enviro-groups. Despite this, Duke faces protracted opposition from enviros
opposed to Duke’s plans for an ultra-modern coal plant and a nuclear plant.

American Electric Power (AEP) generates 38,000 MW from 80 stations. This
Ohio headquartered firm is active in the Virginias, Texas, Indiana, Kentucky,
and Oklahoma. 66% of AEP power comes from coal, but they are quickly building
natural gas plants which now account for 22% of output. AEP has a nuclear plant
and is a major purchaser of wind power. In 2011 AEP announced an accelerated
phase-out of 25% of their coal-fired capacity.

AEP cancelled their $668
million CCS project. When AEP conceived of this project, they were betting on
Cap and Trade passing the Senate. Had Cap and Trade passed, the project’s cost
would have been offset by emission credits, i.e. the project would have been
indirectly paid for by their less deep-pocketed competitors.

A more
militant coal warrior is California’s Pacific Gas & Electric – a company
with 5.1 million electricity customers and 4.3 million natural gas customers.
Their electricity is from nuclear and renewable sources.

These are the
kinds of companies Wall Street Journal editors had in mind when they
penned a scathing indictment of the EPA’s MACT Utility regs (Lisa Jackson’s
Power Play, December 22, 2011). Closing coal plants will cause electricity
shortages. These companies are salivating at the prospect of raking in
super-profits during this period of scarcity. None dare call it a
cartel.

Six
Supplemental Observations

The USA, Australia, and Canada possess half the world’s uranium
and half the world’s coal. That we are monkeying around with wind and solar
power is a travesty. The spectre haunting Europe is a North America dotted with
an archipelago of 4,000 MW coal plants perched on the edges of vast coal fields
and pumping out juice too cheap to meter. China, India, Turkey, and Vietnam are
in the midst of a coal power boom because they understand the meaning of
“neo-imperialist under-development” whereas for Yanks, Aussies, and Canucks such
words are, not accidentally, taboo.

*

Climate Change and its joint venture, the War on Coal, dwell at
the confluence of two grand social forces: environmentalism and the electricity
industry. The international environmental movement is pressing for a
wide-ranging social transformation of which energy policy is but one aspect.
Electricity is but one aspect of energy.

Six electricity generating
methods (coal, nuclear, natural gas, hydro, wind, and solar) account for 99% the
current sold in the world’s multi-trillion dollar electricity market. Underlying
each method lies a distinct industrial complex of resource extraction companies,
equipment manufacturers, specialized engineering, banking, and shipping
interests. These industrial complexes compete for market share. This competition
exists independently of the environmental movement but is warped by the
environmentalists’ preference for renewables.

*

Wind power is an historic boondoggle. EU countries spent $250
billion assembling and hooking-up 60,000 wind turbines with an advertised
capacity of around 75,000 MW but an actual average output closer to 12,000 MW.
South Africa and India are both currently building 4,000 MW coal-fired power
plants for $4 billion each. Coal plants operate at 90% of capacity. The EU could
have spent its wind budget on a coal-powered system capable of reliably
delivering 225,000 MW - eighteen times what they are getting from their erratic
wind farms!

*

Is the “shale gas revolution” the new Climate Change?

The natural gas industry has been a driving force inside the Climate
Change campaign for almost 20 years. Gas industry lobbyists told lies about the
atmosphere to denigrate coal and to win the government approvals and preferences
they needed to build gas-fired power plants, gas storage facilities, pipelines,
etc. Gas industry lobbyists now use controversial estimates of immense domestic
shale gas deposits to advance national energy security arguments to win the
preferences and permits they need to continue building the gas infrastructure.
Advances in horizontal drilling and hydraulic fracturing have produced much gas,
but coterminous with the shale gas revolution has been a bigger liquid natural
gas (LNG) revolution. In the future will gas-electric plants be supplied with
costly, contentious domestic shale gas or with cheap, care-free LNG from Qatar?

*

Environmentalism must be placed in the context of the
metropolitan-hinterland and land-capital dichotomies. The West’s dominant
metropole is the EU’s core area. Ancillary metropoles are found in the US
Northeast and in various narrow corridors: San Diego-Sacramento,
Toronto-Montreal, Sydney-Melbourne, etc. Land in and around these metropoles is
notoriously expensive. Preserving this value bubble means preventing migration
into the hinterlands. This translates into creating evermore parkland and into
policies lessening the metropoles’ dependence on hinterland resources such as
recycling, locavorism, and renewable energy. Ask not what a policy can do for
the public; ask what a policy can do for metropolitan landowners.

*

Finally a word about coal ecology:

Coal is a sedimentary
rock comprised of fossilized plant remains. Usually dead plant matter is
consumed by fire or microbial decomposition. However, in areas adjacent to
stagnant waters plant matter often does not burn and is partially decomposed
into mulch (peat). In slowly subsiding wetlands, peat builds up and is then
buried. Millions of years of intense weight and heat pressure-cook peat into
coal. No alchemy is at work here. No new elements are created or added. Coals,
from the mushy brown lignites to the glassy black anthracites, are at the
molecular level basically garden salads. The carbon, sulphur, and trace metals
compounds emitted by coal furnaces are the same molecules emitted into the
environment by the burning or decomposing of plants. Coal burning presents no
more of an environmental hazard than does the drying up and blowing away of the
golden leaves of autumn.

Sources

hese essays drew upon hundreds of articles, websites and
reports some of which are listed in the text and other are
listed below. If you wish more info on sources please contact me through the
“contact” link on the main page.